Analyst Cuts 2020, 2021 Domestic Box Office Estimates Further

Cinemark theater
Courtesy of Business Wire

Cinemark theater

B. Riley's Eric Wold also lowers his financial forecasts and stock price targets for exhibition companies, but says "attendance trends can approach 2019 levels in 2022."

B. Riley analyst Eric Wold in a Monday report further cut his domestic box office forecasts for 2020 and 2021 due to the coronavirus pandemic.

He cited the fact that the fourth-quarter film slate "has become increasingly barren" and the "continued lack of theater opening visibility for the three key markets of New York, Los Angeles, and San Francisco and the potential that these uncooperative market forces could impact capacity restrictions and the film slate moving into 2021."

"Even though we had already been projecting a 70 percent year-over-year decline in domestic box office revenues in 2020, we are lowering that projected decline even further to 80 percent," he wrote. And he reduced his projection for the 2021 box office from a decline of 20 percent compared with what he called the "2019 baseline levels" to 30 percent.

"However, we are still assuming domestic movie-goer attendance trends can approach 2019 levels in 2022 and continue to project less than a 10 percent box office decline versus 2019 levels for that year," the Wall Street observer noted.

In the report, he highlighted that investors "need to be increasingly selective with the exhibition space given both news flow volatility and liquidity concerns."

Wold on Monday cut his stock price targets for the exhibition companies he covers. Wold's AMC Theatres target price moved from $5.50 to $4.50, while he reduced his target on shares of Cinemark Holdings by $3 to $11. He also shaved $3 off his Imax Corp. target, moving it to $18. And his target on Marcus Corp's stock price dropped from $27 to $21.

Even cinema advertising giant National CineMedia wasn't save from his reductions. Wold now has a $5 stock price target on it, down from $6 previously.